How to Find Affordable Health Insurance

By Maryalene LaPonsie on May 29th, 2010

Finding affordable family health insurance is one of the most difficult challenges facing American households today. As the cost of health care increases, health insurance premiums have quickly climbed to keep pace. According to figures released by the Kaiser Family Foundation, the average cost of family health insurance offered by employers was $13,375 in 2009. Without the benefit of group insurance to spread the risk, individual health plans often charge premiums that are even higher.

Lifestyle Changes Can Reduce Health Insurance Premiums

While family genetics play a role in certain diseases and medical conditions, much of our overall health is the result of individual choices. Fred Bean, an insurance advisor and former board member for the Life and Health Foundation for Education, says, "Consumers can be in charge of health care costs."

Specifically, Bean points to three ways you can improve your health and decrease your family health insurance premiums:

Maintain a healthy weight

Stop smoking

Manage stress effectively

Maintain a Healthy Weight

According to a study conducted by the Centers for Disease Control (CDC), the Agency for Healthcare Research and Quality and RTI International, the medical cost of obesity is an estimated $147 billion annually. On average, an obese person spends 42 percent more in medical care each year than someone at a healthy weight. That's an additional $1,429 in extra care, per person each year.

With the increased costs associated with obesity, the premiums of plan participants who are obese may be higher than those at healthy weights because those with obesity often require more medical care. The best way to reduce your private health insurance premiums may be to maintain a healthy weight by exercising and following a health-conscious diet. Such a change could be good for your pocketbook, as well as your heart and your health.

Smoking Cessation Can Save You Premium Dollars

In addition to maintaining a healthy weight, the next best way to find affordable health insurance is to stop smoking. While smoking does not increase health care costs as much as obesity, the price tag for tobacco-use is $96 billion per year, according to the CDC.

Reduce Stress

Finally, the cost of stress is not as easy to gauge. However, health insurance companies know that effectively managing life's ups and downs can result in real savings when it comes time to pay for medical costs. Some individual health insurance plans offer discounts or incentives for policyholders that participate in wellness programs. Maintaining a healthy blood pressure will also help hold down your premiums.

Coverage Changes That May Reduce Health Insurance Premiums

Even if you are a non-smoker who is already at a healthy weight, you can reduce your health insurance premiums by modifying your coverage. Some of the changes you can make to your health plan include adjusting:

Deductibles

Co-payments

Co-insurance

These represent your out-of-pocket costs and by offering to pay a greater share of your health care bill, you can receive a reduction in your premium. For example, if you rarely visit your doctor and have few health care costs, you may be able to increase your deductible and reduce your premium.

Another option may be to switch from traditional private health insurance, such as an indemnity or fee-for-service plan, to a plan such as a Preferred Provider Organization (PPO) or a health maintenance organization (HMO) plan. Health insurance offered by a PPO or an HMO often requires you to use providers that are a part of the plan network. While this may limit your health care provider choices, it can also lead to more affordable medical insurance costs because PPO and HMO plans usually have limited out-of-pocket expenses (as long as you see in-network providers) and relatively affordable premiums.

Buyer Beware

While the insurance industry is regulated in each state, Bean advises consumers to carefully select their insurer. "Look at the finances of insurance companies and their ratings," he says. "It can be very dangerous to use some of the small companies." Health insurance companies that are not financially sound may go out of business and leave you to foot medical bills. Another risk is having a small company rescind your policy once you begin submitting claims.

In addition to gathering your own health insurance quotes, Bean suggests that families contact an insurance advisor or broker to decipher health plan details. "Insurance can be like a foreign language," he says, "Professionals can provide personalized care."